KPMG survey: Saudi CEOs positive about future growth

Abdullah Al-Fozan, chairman of KPMG in Saudi Arabia.
Updated 17 December 2018

KPMG survey: Saudi CEOs positive about future growth

Chief executive officers in Saudi Arabia remain moderately optimistic about the growth prospects of the Kingdom’s economy, as it diversifies away from oil, according to a survey by KPMG Al-Fozan & Partners, an audit, tax and advisory service provider.

The cautiously pragmatic outlook of the CEOs in Saudi Arabia also reflects the fast-changing and challenging domestic and global environment, such as the slowdown in the private sector and looming trade wars.

In its second edition of the “Saudi Arabia CEO Outlook 2018” report, KPMG Al-Fozan & Partners said nearly two-thirds  of Saudi CEOs are positive about the future growth prospects of the economy and remain positive about the government’s economic diversity programs and initiatives to reduce oil dependence, notably Saudi Vision 2030 and its realization programs.

In this year’s findings, 92 percent of CEOs in Saudi Arabia are confident about the growth of both their companies and industries over the next three years The latest CEO survey is based on the input of 50 CEOs in Saudi Arabia, who took part in the KPMG’s “Global CEO Outlook” report. 

While the report found that global CEOs have become less positive about global growth compared with the previous year, CEOs in Saudi Arabia are more confident about future growth prospects than their global peers. The confidence level of Saudi CEOs about the global economy stood at 94 percent this year as against 55 percent last year. 

Meanwhile, Saudi CEOs rank “return to territorialism” as one of the key challenges to their growth, with 74 percent finding it as one of the top three risks faced by their organization. 

Abdullah Al-Fozan, chairman of KPMG in Saudi Arabia, said: “GCC economies have been experiencing an unprecedented change in the wake of a prolonged period of low oil prices. However, as Saudi Arabia embraces robust national strategies of economic diversification, its CEOs have expressed a very encouraging level of confidence in their business for the next three years.”

He added: “Saudi Arabian CEOs are positive about future growth, considering the economy is diversifying away from oil and real growth is expected to be supported by services and manufacturing. Moreover, a moderate recovery in oil production levels and marginally higher public spending are also expected to support a positive macroeconomic outlook.”

According to Arvind Singhi, head of clients and markets at KPMG in Saudi Arabia, 62 percent of the Saudi CEOs indicate developed markets as their biggest priority for geographical expansion over the next three years, with North America and Australia being the most important regions.

Gaming giant Tencent Games picks Dubai for MENA headquarters

Updated 50 min 38 sec ago

Gaming giant Tencent Games picks Dubai for MENA headquarters

DUBAI: China’s Tencent Games has chosen Dubai as regional headquarters for its Middle East and North Africa operations, with Dubai Internet City housing the gaming giant’s office.

Tencent Games was launched in 2003 and has since grown into a global platform for game development, publishing and operation. Its ownership stakes and alliances with many major video game companies includes Fornite, Ubisoft, Activision-Blizzard, Riot Games, Supercell and Take-Two Interactive Software.

The opening of Tencent Games’ regional headquarter is an indication of increased activities in the local and regional games industry which covers digital entertainment, education and cultural experiences, a statement said.

According to market research firm Newzoo, the revenue of the UAE games sector is estimated at $324 million (1.2 billion dirhams) in 2019. Furthermore, over 80 percent of smartphone users in the UAE play mobile games, it said.

The UAE has the highest mobile penetration rate in the world at 173 per cent – nearly double the country’s population, according to a report by Statista released in late 2018. This is a considerable figure and represents a wealth of opportunities for game developers, with revenues from mobile games representing more than half the income generated in the entire industry.

“Gaming moves beyond entertainment and is increasingly used to engage and educate, and as more gamers and creative enthusiasts enter the industry, we can certainly expect the market to develop rapidly in the coming years,” Ammar Al-Malik, managing director of Dubai Internet City and Dubai Outsource City said.

Vincent Wang, general manager of the Global Publishing Department at Tencent Games, said: “The UAE’s high mobile and internet penetration is an extremely encouraging indicator for tech firms across the world, and is especially relevant to the global games industry.”